Quantcast

European Investment Bank Will Stop Funding Fossil Fuel Projects by the End of 2020

Business
The European Investment Bank building (left) across from the European Court of Justice in Luxembourg. Westend61 / Getty Images

When the calendar turns over to 2021, fossil fuel companies won't have the European Investment Bank (EIB) to turn to for loans anymore. The EU's lending arm has decided to use its money to help stop the climate crisis by no longer funding fossil fuel projects and to ramp up its investments in clean energy, according to Bloomberg.


The EIB's plans will stop companies that rely on coal, oil or gas in their infrastructure projects from applying for funding. The move dovetails with the EU's sense of urgency in stopping the global climate crisis that has the continent sweltering this summer under record-setting temperatures. Besides the heat, European countries have also seen an increase in storms and floods linked to the climate crisis, which fossil fuels contribute to.

"These types of projects will not be presented for approval to the EIB Board beyond the end of 2020," said the EIB's strategy paper, as Reuters reported.

The EIB's strategy paper laid out its focus on long-term investments that aligns with the Paris agreement, which aims to cap a global rise in temperatures at 1.5 degrees Celsius above 1990 levels.

"This transition will be profound. Solidarity is required to ensure that potentially vulnerable groups or regions are supported," the report said, as The Guardian reported.

The bank plans to create an energy transitions fund to support projects that will help member states transition to cleaner energy. The strategy paper sets a markedly different strategy for the lender, which has heavily funded fossil fuel projects for the past six decades, including the Transadriatic gas pipeline and oil storage facilities in Cyprus.

The move away from fossil fuels comes after a growing wave of pressure bearing down on financial institutions to cut their ties to projects that increase greenhouse gas emissions.

In June, for example, 80 civil society organizations and academics published an open letter to the EIB demanding that it end its fossil fuel financing, which was nearly $3 billion in 2018. The letter accused the bank of "lagging behind the science" underpinning the climate crisis, according to The Guardian.

Environmental activists praised the EIB's plan.

"The EIB's proposal to end financing for fossil fuels by 2020 is a massive step forward in climate leadership," said Alex Doukas, from Oil Change International, as The Guardian reported. "With this move, the world's largest multilateral lender is now poised to leave oil, gas and coal in the past. The EU member states who control the bank must now stand behind the EIB's ambitious climate vision, and other financial institutions should quickly follow suit to stop funding fossils."

Colin Roche, a campaigner at Friends of the Earth Europe called the proposal is "a crack of light in the darkness," as The Guardian reported. "While the EU and national governments are floundering as the planet burns, the EU's public bank has made the brave, correct and just proposal to stop funding fossil fuel projects. We are now urging the European Investment Bank's board to endorse this step forward, and ensure there are no loopholes for fossil fuel funding."

The EIB board, which is made up mostly of EU finance ministers, will discuss the proposals at a meeting in September, though a final decision could take longer, according to Reuters.

EcoWatch Daily Newsletter

Sea level rise causes water to spill over from the Lafayette River onto Llewellyn Av.e in Norfolk, Va. just after high tide on Aug. 5, 2017. This road floods often, even when there is no rain. Skyler Ballard / Chesapeake Bay Program

By Tim Radford

The Texan city of Houston is about to grow in unexpected ways, thanks to the rising tides. So will Dallas. Real estate agents in Atlanta, Georgia; Denver, Colorado; and Las Vegas, Nevada could expect to do roaring business.

Read More
Malala Yousafzai (left) and Greta Thunberg (right) met in Oxford University Tuesday. Wikimedia Commons / CC BY 2.0

What happens when a famous school striker meets a renowned campaigner for education rights?

Read More
Sponsored
A coal-fired power station blocks out a sunrise in the UK. sturti / E+ / Getty Images

According to a recent National Oceanic and Atmospheric Administration (NOAA) report, the last time carbon dioxide levels were this high was 3 million years ago "when temperature was 2°–3°C (3.6°–5.4°F) higher than during the pre-industrial era, and sea level was 15–25 meters (50–80 feet) higher than today."

Read More
Passengers arrive in Los Angeles from Asia on Feb. 2. MARK RALSTON / AFP via Getty Images

The spread of the new coronavirus, COVID-19, could cause "severe" disruption to daily life in the U.S., public health officials warned Tuesday.

Read More
A harbour seal on an ice floe in Glacier Bay, Alaska. A new study shows that the climate crisis has warmed waters, changing ecosystems and crippling sea ice growth. Janette Hill / robertharding / Getty Images Plus

The climate crisis is accelerating the rate of change in Alaska's marine ecosystem far faster than scientists had previously thought, causing possibly irreversible changes, according to new research, as Newsweek reported.

Read More